How Forbearance Can Change Your Credit Scores

Q:
How might deferred payments, missed payment allowances and other actions by credit card issuers be reflected on credit reports?

A: It’s important to remember that even one late or missed payment may impact credit scores and remain on credit reports for seven years. But generally, late payments don’t end up on credit reports for at least 30 days after you miss the payment. That means it’s possible to make up a late payment before it shows on credit reports. However, interest and late payment fees may still apply.

If you’re out of work or struggling due to the pandemic, contact your lenders and creditors to explain your situation and see if any accommodations can be made. In some situations like Covid-19, it’s possible that lenders and creditors may have special assistance available to reduce the risk of impacting your credit standing. Some creditors or lenders may waive late fees or offer short-term loans, and some may provide the opportunity to make reduced payments, interest-only payments, or no payments for some period of time — a practice known as forbearance. Keep in mind, however, that accounts in forbearance can still be reported as late or missed payments by lenders and creditors to the three nationwide credit bureaus.

If your asking for help, be sure to ask questions that protect your future.

Posted on May 31, 2020 at 6:20 pm
Sally Melby | Category: Uncategorized

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